Amcor to buy Shenda plants

By: Steve Toloken

January 14, 2013

Australian flexible packaging giant Amcor Ltd. plans to acquire two film packaging plants from China’s Shenda Enterprise Group, expanding its footprint in the country to nine factories and more than 2,600 workers.

The plants, in Jiangsu province near existing Amcor Flexibles Asia Pacific facilities, will focus on multilayer films and printing for the snack, pharmaceutical and personal-care markets, Amcor said in a statement.

“The signing of this memorandum of understanding highlights our commitment to growth in the emerging markets,” said Ralf Wunderlich, president of Amcor Flexibles Asia Pacific, in a statement.

The website of the city of Wuxi, where Shenda is based, said Amcor and Shenda had reached an agreement to jointly build a US$120 million flexible packaging development center in Wuxi. The center will focus on research, development, production and sale of aluminum foil and nylon composite materials, along with special bag-making, printing and “soft plastic” films.

Amcor’s statement, which it provided to Plastics News, does not cite a development center or the size of the investment, and the Wuxi statement does not include a reference to Amcor buying any Shenda operations. Both statements are dated Nov. 22.

Amcor said the non-binding agreement with Shenda is expected to close “in the coming months.”

The Wuxi government said Amcor’s decision to invest in the packaging center is a vote of confidence in local ports and will help upgrade local industry.

The two new Amcor plants continue a recent pattern of that firm’s investment in China.

In its annual report for the fiscal year ended June 30, Amcor said it bought out partners in two joint ventures in China during that year, in Chengdu and Beijing. The firm said China sales rose 13 percent in that period, led by capacity expansions, and noted good prospects in health care and high-barrier film markets there.

Shenda claims to be the largest maker of flexible packaging in Asia, with 550 million pounds of annual capacity in several plants in China, processing materials such as biaxially oriented polypropylene and PET films and specialized multilayer coextrusion films. It claims a 35 percent share of China’s tobacco packaging market.